To date, the planned privatisation of the Greek state company has not yet been formally completed. So far, any privatisation of the company has encountered regulatory hurdles. Although Azeri SOCAR bought a 66% of the company's shares back in mid-2013, the EU's competition authorities put the brakes on the formalisation of the deal, citing the third energy package. Now, after a series of negotiations, Belgian firm Fluxys has stepped in, seeking to buy at least 17% of the offerd shares, thus decreasing the Azeri majority in the company.
In the meantime, DESFA has progressed with its intentions to boosting the usage of gas in Greece. That includes upgrading the volume capacity of the Revythousa LNG terminal by 40%, as well as taking part in the establishment of the Vertical Corridor with Bulgaria, which will then traverse up to Romania and Hungary. Furthermore a set of new compressor stations are going to be built in the mainland along with new transmission connections to the LARKO nickel industrial complex, the ELPE oil refinery and an array of smaller lines that will connect smaller cities and communities in the mainland with gas.
Security, too, is going to be upgraded. New automation systems and new meter stations are in progress. Another project is to set up mini-LNG terminals to secure the needs of remote island communities that usually have increased energy needs during the summer season, and little energy use in the rest of the season. The approved budget for the works is $2.6 billion (USD) and is not conclusive, since it stipulates that more projects will come in place once and if private investors are interested in participating in those, including a new LNG terminal and an underground storage facility.
Fluxys has in interest for the Greek gas market in the long-term nature; it's a main shareholder of the Trans-Adriatic Pipeline with 19% of that project's shares. Fresh reports from the Belgian press indicate that it aims to establish DESFA as the main gas hub company in Southeast Europe and that it is currently in the due diligence process before acquiring a stake in the entity. Its main competitor so far is the Italian Snam which has also expressed an interest, but has not formalised its plans.
The interest of Fluxys looks promising for DESFA. Nevertheless, there is a catch. One of Fluxys's main shareholders, the Canadian fund Caisse de dépôt et placement du Québec, is vetoing its entrance into the Greek market. As an alternative, the senior management of Fluxys is seriously considering becoming involved in a joint venture with the FPIM investment fund company and the Publigas one, both Belgium-based firms. They plan to raise capital from available funds from the European bank of reconstruction and development (EBRD).
In the long-run Greek pundits expect Fluxys to raise more capital for joint projects with DESFA but also the other state gas trading company, named DEPA. The waiting time for the privatisation process of DESFA may have been long but the large infrastructure project in the gas sector that will be materialised in the country in the coming years may make it worth the wait for Fluxys.
Ioannis Michaletos
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